News release

The top investment consultant for the county pension fund has sold his company and is returning to Texas. The chief executive may not be far behind.

Lee Partridge, the portfolio strategist hired as an outside consultant last year because retirement board members found the county salary caps too limiting, sold his Integrity Capital LLC to Texas-based investment firm Salient L.P.

Partridge will become that company’s chief investment officer and hopes to still service the county pension fund account.

Integrity is the company Partridge formed last year as a Nevada corporation to manage the county’s $7.7 billion pension fund. The sale price was not disclosed.

Both White and retirement board Chairman Douglas Rose called the Integrity sale a benefit to the San Diego County Employees’ Retirement Association. They said the association would gain more resources for the same price called for in its contract with Integrity.

“It’s good news for the pension system,” Rose said. “We still have the same contract with Partridge and he’ll continue to provide us those services and provide us additional resources at no cost.”

The change comes at the same time White confirmed he is a finalist for an executive job with the Teachers Retirement System of Texas, the $100 billion-plus fund that formerly employed Partridge as deputy chief investment officer.

White said the developments were strictly coincidental.

“I don’t think retirement associations have policies where they look for ‘a player to be named later,’” he said. “That only happens in baseball.”

Partridge could not be reached for comment Friday.

His letter to White notes that he has agreed to waive a termination fee that is included in the contract he signed with the county pension fund, should the pension system decide not to keep him on. That waiver is worth approximately $300,000.

Partridge moved to San Diego a year ago for a job replacing the pension fund’s ousted chief investment officer, David Deutsch, who was terminated in March 2009 after the fund’s value fell by $2 billion.

Deutsch had been paid $209,000 a year.

The retirement board wanted to pay Partridge more, but ran up against county salary caps. Therefore, Partridge was hired as a consultant under a 39-month contract that allowed him to be paid up to $4.5 million depending on performance.

The arrangement raised questions about who the pension-fund investment staff reported to. County rules do not allow public employees to report to consultants.

It is not clear whether the retirement board might hire a chief investment officer, given Partridge’s new situation. Rose said it was not necessary; White said he would be evaluating the situation before making any recommendation.